AT&T plans to raise insurance costs for iPhone users and begin to throttle the top 5 percent of its data users as it prepares for the launch of Apple's fifth-generation handset.

The wireless provider on Friday updated its insurance information webpage to note that starting Oct. 4, rates will jump from $5 to $7 for both new and existing customers.

As Electronistapoints out, the price hike arrives in conjunction with the establishment of a new device tier ( Device Tier 3) for iPhone and "other devices" that carries a $199 non-refundable deductible.

The changes go into effect the same day Apple has scheduled a media event to take the wraps off its latest line of iPhones. As such, the timing may suggest that Apple and it partners may begin accepting pre-orders shortly after the announcement, given the new insurance plan will go into effect the same day.

Another change coming to AT&T customers ahead of the new iPhone is the throttling of data speed for its heaviest users.

Some of these customers began receiving text messages from AT&T this week, advising them that their data usage places them in the top 5 percent of the network and warns of reduced speeds beginning Oct 1st. Reddit user skelatwork posted an image of a text he received from the carrier on Thursday, claiming he had used over 11GBs at the time.

AT&T released a statement in July preparing users for the bandwidth cap, though it has never outlined what usage statistics constitute being in the top 5 percent.

Couldn't this be considered a material breach of the contract with it's users and allow users to break their contract, to go with, say Sprint- who says they will not throttle users?

How? You're still allowed unlimited data usage. There's no stipulation in the contract that states your data will always be at a high speed.
And now that the major providers have either tiered or capped data plans where are you going to go? Face it whether you like it or not you're stuck with your current provider for life.